Mercedes Bets Big On EVs With New US Investment, Musk Tweets Not Enough – Then Gets Smacked Down

Mercedes-Benz announced a new $1 billion EV-related investment into its manufacturing plant in Tuscaloosa, Alabama – on the 20th anniversary of the facility.

Mercedes”team excitement” in Tuscaloosa, Alabama, with Kay Ellen Ivey announce new major investment.

The investment will expand the operations of its existing manufacturing plant to accomodate the production of passenger EVs in the U.S., as well as to add battery production for those upcoming electrified cars.

The Tuscaloosa plant will produce “SUV models for the company’s EQ brand“, which could mean both all-electric (such as the EQC) and/or plug-in hybrids as well.

Construction of a new battery production facility (the 5th for Daimler), near the existing plant will begin in 2018. EV production should then start around the end of this decade.

But what made the announcement ‘fun’ was when Elon Musk decided to retort to a random USA Today story on the event, after being egged on by the paper in a tweet.

Musk stated that that the German company’s investment was “not a lot of money for a giant like Daimler/Mercedes”, adding that he wished they would do more, “…off by a zero” Musk tweeted.

That’s not a lot of money for a giant like Daimler/Mercedes. Wish they’d do more. Off by a zero.

Here is the thing, that $1 billion investment was just into this one plant and not a cumulative number, Daimler has actually has announced (and is now installing) more than $10 billion into advancing its EV program. In a rare twitter-fight, Daimler AG (which is just 25% larger than Tesla by market cap) fired back.

So, the Tesla CEO got a bit owned there, and it is surprising Musk had not been following one of his main competitor’s more closely; but then again, we have all gotten a bit in front of ourselves from time-to-time – and to his credit, Musk did tweet back , but in the most concise of ways.

Still, it is a bit odd to see the confrontation in the first place, as Daimler is widely credited (by Musk himself no less) for saving Tesla with a $50 million dollar investment in the EV maker in 2009.

Anyway, back to the news at hand.

Bringing electric car production to Tuscaloosa ultimately will result in more than 600 new jobs according to Mercedes.

The production of the all-electric SUV (EQ C), will begin in Bremen, Germany in 2019 (followed by three other EQ models). It’s unlikely (probably less than a 1% chance) that production in U.S. for US customers would start before German-based production comes online.

New battery plant to be built near the existing passenger-car plant, making it the fifth factory in the global battery production network of Mercedes-Benz Cars with sites on three continents.

Company expands logistics activities for supply of worldwide markets.

Investment expected to create more than 600 new jobs in the region.

Mercedes-Benz EQ Concept

Tuscaloosa, AL/USA – As part of its ongoing commitment to engineer and manufacture the world’s most attractive vehicles, Mercedes-Benz will set up electric vehicle production in the United States. The company plans to produce EQ-branded SUV models at MBUSI (Mercedes-Benz U.S. International), its Tuscaloosa, Alabama facility. At the time being launched, the EQ models will feature the latest status of automated driving – always under the premise of safety and in compliance with the statutory regulations. In addition, a battery plant will also be built near the existing passenger-car plant ensuring availability of cutting-edge technology for future generations of Mercedes-Benz vehicles built in the U.S. In total, Mercedes-Benz plans to invest $1 billion in the expansion of its industrial footprint in the region, most of which is slated for the electric initiative. It is expected that once completed these investments will create more than 600 additional jobs. Final details of the plans are still being worked on in partnership with the State of Alabama.

“We are excited to celebrate 20 years of production in Tuscaloosa by expanding our operations in the region and by bringing our electric initiative to the United States. With this one billion dollar investment, we are significantly growing our manufacturing footprint here in Alabama, while sending a clear message to our customers across the U.S. and around the world: Mercedes-Benz will continue to be on the cutting-edge of electric vehicle development and production,” said Markus Schäfer, Member of the Divisional Board of Mercedes-Benz Cars, Production and Supply Chain. “With production locations for EVs and batteries in Europe, China and, now, the U.S., our global network is ready for the era of electric vehicles. Thanks to our plant modernization in Tuscaloosa, we will be able to quickly ramp up U.S. production of EQ models, while also being more flexible to our customers’ demands for innovative vehicles that live up to the excellent quality that is synonymous with the Mercedes-Benz brand.”

In addition to the electric initiative, the logistics activities in the U.S. will be expanded with a new Global Logistics Center and a new after-sales North American hub, exporting car-kits to global assembly plants and spare parts from the U.S. and North America to worldwide markets.

Mercedes-Benz EQ Concept

“With the addition of electric SUVs to our future fleet, we will provide discerning drivers with a new, high quality automotive option that will marry performance, luxury, and environmental stewardship,” Markus Schäfer said. “As a result of our investments in Alabama, Mercedes-Benz customers will soon be able to enjoy advanced technology coupled with a luxury driving experience.”

The plant in Tuscaloosa exclusively provides worldwide clients with the SUV models GLE, GLS and GLE Coupé that continue the proud tradition of quality associated with Mercedes-Benz. With the upcoming production of the next SUV generation the plant will enhance its proven production portfolio with modern plug-in hybrids, responding flexibly and efficiently to market demand. With the additional integration of electric vehicles, the plant is shaping the future of electric mobility worldwide. The announcement was part of the 20-year celebration at MBUSI. Dignitaries attending the event included Alabama Governor Kay Ellen Ivey as well as other local and state officials.

“This is an exciting day for MBUSI and our entire team here in Alabama,” said Jason Hoff, President and CEO of Mercedes-Benz U.S. International during the “All Team Member” meeting. “Looking back on 20 years of production, the Mercedes-Benz plant in Tuscaloosa has been a success story from the beginning. We are now continuing this story with a clear vision for the era of electric mobility. We are proud that Tuscaloosa will be an integral part of our company’s evolution to electric vehicles contributing to the long-term success of Mercedes-Benz Cars.”

“The fact that Mercedes-Benz continues to expand its operations in Alabama makes a powerful statement about the quality of the global automaker’s workforce in the state, and underscores that we are achieving our goal of ensuring businesses in Alabama don’t just survive, but thrive,” Governor Kay Ivey said. “For the past two decades, MBUSI has been a tremendous partner in the growth of our state, and we look forward to strengthening those bonds in the years to come.”

Tuscaloosa is home to Mercedes-Benz’s SUV production for the world market, having started production of the former M-Class (today the GLE) in 1997. As the first automotive manufacturing location in the State of Alabama, the plant also served as the catalyst for additional OEMs, automotive suppliers and supporting businesses to come to the area, creating thousands of jobs in the region and leading to Alabama’s strong position as one of the key automotive business clusters in the United States. Mercedes-Benz exports more than 70 percent of its SUVs to markets around the globe. With an earlier investment of $1.3 billion announced in 2015, the plant is currently being expanded to prepare for the production of the next SUV generation including plug-in hybrid models. The plant expansion comprises a new Body Shop, major enhancements to the SUV Assembly Shop as well as upgraded logistics and IT systems.

Electric vehicles from the family of EQ branded products

Mercedes-Benz EQ Concept

Mercedes-Benz will start producing SUV models of the EQ brand in Tuscaloosa at the beginning of the next decade. EQ models will be integrated into the series production at the plant. This is possible because of the early investments in flexibility and technical equipment at the plant that offer trailblazing Industry 4.0 technologies. With the Tuscaloosa plant, Mercedes-Benz will have electric mobility hubs on three continents serving customers’ demand around the globe.

By 2022, the company will electrify the entire portfolio of Mercedes, offering customers at least one electrified alternative in all segments from smart to large SUVs. The company is planning to offer more than 50 electrified vehicle variants. At the same time, Mercedes-Benz will be continuously supporting the development of plug-in hybrids and the introduction of 48-volt-systems. The first EQ series model, EQC, will go into production in 2019 in Bremen, Germany. Technology and product brand EQ is an integral part of CASE, which stands for the intelligent combination of the strategic pillars of connectivity (Connected), autonomous driving (Autonomous), flexible use (Shared & Services) and electric drive systems (Electric).

Fifth Mercedes-Benz factory to produce batteries

The battery factory near plant Tuscaloosa will be part of the global battery production network of Mercedes-Benz Cars for local demand and export. In total, Daimler will invest $1.18 billion (more than one billion Euros) in the battery production network, which will also include production facilities in Germany and China. As in vehicle production, the battery production network will react flexibly and efficiently to market demand. This strategy ensures the ongoing availability of modern battery technology through local production hubs in Europe, China and the U.S. and puts Mercedes-Benz in a highly competitive position for its electric initiative. Construction work for the new one million square-foot facility in Tuscaloosa is expected to begin in 2018, with operations planned to start at the beginning of the next decade.

Expansion of logistics activities

Expanding its industrial footprint, Mercedes-Benz is also building a new Global Logistics Center and a new after-sales North American hub in Bibb County, five miles from the plant in Tuscaloosa.

The Global Logistics Center will support worldwide logistics operations connected with products “Made in Tuscaloosa” and will supply oversea assembly plants with car-kits, where Mercedes-Benz produces vehicles for local markets. Operations including brand new IT systems to support lean logistics processes in the new warehouse are scheduled to begin in 2019.

Additionally, Mercedes-Benz is consolidating the three existing after-sales warehouses at a new location. The new after-sales North American hub will be co-located with the new Global Logistics Center providing markets abroad with spare parts. This allows the company to meet rising market demands amid the growing variety of models. The new hub is scheduled to start its operations at the end of 2020.

About Mercedes-Benz Tuscaloosa plant

MBUSI – located in Tuscaloosa County, Alabama – is the production location for the GLE, GLS and GLE Coupe SUVs around the world, as well as the C-Class sedan for North America. In 2016, the plant produced more than 310,000 vehicles. MBUSI currently employs more than 3,700 team members and supports 7,000+ jobs on the approximately 1,000-acre site. In September 2015, MBUSI announced a $1.3-billion plant expansion and new jobs to pave the way for production of future SUVs. The expansion makes plant Tuscaloosa one of the “smartest” automotive facilities in the world.”

More particularly, Elen believes ALL Auto OEM’s Need to Do More, and Better, and Sooner, “Compelling” EV’s, so that WE will All Want Them!

He knows, also, the Best EV, even from Tesla, is Not Good Enough, If there is any unanswered question on “Where do I Charge it up fast, on a Trip?”, or “I would Love an EV, but Can’t charge it up at my Condo/Apartment!”

And that is why they are not waiting on others to answer that question, as well! The Supercharger Network they are currently building, is just an obvious 1st step to answer that question! Destination Chargers are Supplements to that.

When Superchargers are covering all Interstate Freeways at 80-100 Mile intervals in sufficient quantities, they will then push to cover State Highways similarly, then County Roads, or equivalent, in each key market they sell and deliver in!

They are also working on supplied sollutions for the Condo & Apartment Dweller EV Charging Challenges, too!

For sure competition in the EV market is good for the world and good for Tesla and MB. The old addage I wAs told as a kid decades ago- when a Burger King is across the street from a McDonald’s they both do better business.

Musk misinterpreting M-B’s investment by responding to a USA Today tweet didn’t change anything here. M-B is still doing exactly what they wanted to do, which is invest a whole lot more than $1B into this.

The other responses in this thread show a complete lack of understanding of what Musk intended to do with Tesla all along:

Force other automakers to compete with Tesla, to build better, faster, electric cars that go further. It’s almost like the entire point of Tesla is to scream “DO IT, YOU BASTARDS! TRY TO KILL US! OUTCOMPETE US! DO IT BETTER THAN US!”

Tesla produced non-lemon cars at reasonable prices only after the technology was mature. The cycle is:

technology -> opportunistic early adopters -> regulatory framework.

Even then, Nissan beat Tesla to market with a mainstream EV (the LEAF), and Chevy beat them to market with a mainstream 200+ mile EV (the Bolt). Tesla did get there first with the Roadster, but it was a lemon which sold in low quantities.

To bad GM, with the Bolt, don’t have done like apparently MB is doing, investing big for truly mass produce an EV, what Tesla was not in condition to do at the time of Leaf realize, and even today as they are barely able to do it with the Model 3 BECAUSE of the brand name they built in the mean time with all their “lemons” like Tesla haters like to portrait Tesla cars. But maybe you would have done better…?
GM had all the money, century long experience in mass production and thousands of engineers do do it right, but instead of doing an assembly line at the very least 100.000 cars / year, they only did one for 50.000 cars and only contract enough batteries and powertrains for 30.000 cars/years. That’s the big difference between betting everything in mass product a EV like Tesla is doing with the Model 3, and dragging feet like GM is one more time doing. If Elon Musk was at GM direction, with all the capacity of this legendary giant, surely he would have made a 200.000 cars/year assembly line, and without risking GM future. That’s the big difference between the will of one and the greed of dispensable CEOs only interested in granting big bonus and a golden retirement.
The big error of Elon Musk is that he really didn’t know what other car markers are doing and only read and headline about MB investment in EVs. He simply doesn’t have time to that.

“Tesla did get there first with the Roadster, but it was a lemon which sold in low quantities.”

Hmmm, the only “lemon” here is your serial campaign of anti-Tesla FUD posts.

Bill Howland frequently used to post his complaints about his Tesla Roadster to InsideEVs, but he’s definitely the exception. Overall, the Roadster was — and to some extent, still is — a wildly popular and highly desirable car. It’s also the car which kicked off the modern EV revolution.

Most auto makers desperately hope to make a “lemon” like that some day!

I’m not so sure. When Tesla bought that German automation company, and banned BMW from using them, I’m sure it was to stifle competion in one way or another.
They were the preferred partner BMW used. .

“Reason” they Bought the company was to serve Tesla’s needs & they have more than enough to do and cannot take on anymore work.So either they complete their work for Themselves (Tesla) or BMW …What would you do?

Mercedes Must be Pretty Mad that they are forced to Transition, They were very happy “Making Big Bucks”$$$$ As they were “Choking” the life out all living things on this planet with their “Clean “BS” Diesel.(OXYMOROM) I had no Idea that Mercedes was out to take down Tesla ….I hope it Blows up in their Face in a Big Way!

Elon is too smart to put himself in such a Vulnerable position where someone can take him over . He always has Full Control of whatever he does and will never play 2nd Fiddle to anyone . That is just only one of the reasons to his success.

EU regulations, and several countrues that will ban ICE car sales may have something to do about it too.
It is all about the green shift.
This + Tesla, VW/Audi/BMW have made MB to speed up their EV line with 3 years.
That was the answer I read in a German industrial news Magazine.

Tesla went public with the Roadster, when? I think it was about 2006 or so. It took 2 years to get the first ones to buyers. 4 years later, the Model S shipped in June 2012. And Nissan Brought out the Leaf in 2010! GM teased us with a few Spark EV’s, starting in 2013 or 2014, and finally the Bolt EV in December 2016! It will take GM nearly a Year to get to a steady 3,000 per Month on that!

Every country that is aware, knows the above, and they also know that there are more Tesla Model 3’s being reserved that have been sold by any EV Maker in a Year, to date!

Basically, the signals are visible to anyone who can see! People want Compelling EV’s! Today!

Tesla started producing Roadsters for sale in March 2008. It “went public” with its IPO on June 29, 2010. The latter was part of funding the process of gearing up to produce the Model S; it didn’t have much if anything to do with producing the Roadster.

Well, I must say, that Twitter exchange was far more civil than I expected from the — let us say — overly dramatic headline.

Good that some auto makers are finally, if grudgingly, starting to invest real money in building EVs.

But I agree with Elon: Only $1 billion invested in battery production isn’t a serious amount for a major auto maker. Auto makers have been complaining that an EV powertrain leaves them with little or nothing to compete on. Well, it’s certainly true that EV motors (just the motors) are peas in a pod. But they can, and will, compete on such things as inverter efficiency and the qualities of their batteries.

EV makers who just buy commodity batteries off the international market will be making less competitive cars.

Well, who knows? You may eventually be proven right, after enough years pass.

But right now, it’s pretty clear you can’t point to any success. Nissan has sold off its battery factories only as part of a “race to the bottom”; a general strategy of capturing the bottom end of the street legal BEV passenger car market. GM is depending on suppliers LG Chem and LG Electronics, apparently as a way to limit development costs for the Bolt EV, but has limited production to little more than they need to satisfy ZEV credits.

Tesla and BYD are the only EV makers going all-out in ramping up to significant production of PEVs. And, funny thing, both of them control their own battery supply by owning high-capacity battery factories.

Mercedes sold over 383,000 in the USA in 2016. Tesla’s Gigafactory will cost $5 Billion for 1.5 Million car batteries a year. If Mercedes $1 Billion they should be able to make 300,000 EV’s so not a bad investment!

“Building foreign EVs in Alabama is a bit strange. What will the climate-denier EV-hating workers think?”

Somehow, I think if offered good steady paying jobs at an EV auto parts supplier or EV auto assembly plant, Alabamans won’t let their political beliefs stop them from applying for work! And if a few of them do, their neighbors won’t be so picky.

“…The project was scheduled to begin in 2017, with about 400 locations across Europe planned in the first phase…Nine months have passed since the announcement and the current number of charging stations is still zero…”

I don’t see anywhere where he got “smacked down”… he said there should be an extra 0, they said there is, he said good. He *wants* them investing more, he *wants* competition. He’s happy with this. BS headline.

Well, if there is one thing Elon Musk is an expert on, it’s zeroes that have gone missing. After all, he did claim that Tesla would make 200,000 Model 3s in the second half of this year, and there’s going to be at least one zero missing there.

Where have you seen reports that Elon expected 200,000 Model 3 in the second half of 2017? I’ve seen no estimate from him nearly that high. Let’s not spout FAKE news. Tesla stated 40,000 per month in 2018. While I think that is still a stretch goal, they would need to be at that rate in December of 2018, not now.

First off: “up to” 200k was a straight up lie, no less than if Elon would have said that Tesla could sell “up to” a million cars in 2018. It is completely unhinged fantasy and it always was.

Secondly, Elon said that his expectation was to produce “100,000 to 200,000 Model 3s” in the second half of 2017. 100,000 is still utter fiction, and that was the LOWER range of what he claimed as the expected output. So unless Tesla averages over 7000 Model 3s per week from now until the end of the year, he will STILL be missing a zero from the low end of his range.

I don’t, either. I had to come back and read this discussion thread again, to see how it got up to an astonishing 80 comments on an extremely trivial subject!

It’s sad to see so much naked jealousy of Elon Musk expressed, especially on what is supposed to be a forum for those interested in EVs, but lately seems more and more to be taken over by FUDsters and Tesla haters. 🙁

This should put competitive pressure on BMW and VW. Sounds like a major investment to me. VW has been playing the 100 different concept cars for a while, but now it looks like Diamler is actually going to be making a substantial number, if their current production numbers at the plant are any indication. Very impressive and I bet it makes BMW and VW execs sweat under the collar a bit.

Let’s hope it forces GM to get off their collective rear ends and produce a full lineup of EREVs and EVs. GM is squandering their conquest sales by not producing a full complement of vehicles for their current Volt/Bolt owners to move into.

I’m also a Volt owner and want my next vehicle to be a GM vehicle but if they don’t make an EREV or BEV in more classes I won’t be able to. I’m wanting something along the lines of an EREV Equinox or Colorado, hell give me a proper EREV wagon and I would be happy. But GM seems to have no interest in building anything other than compacts as PEVs. And it’s a shame that I’ll likely have to look elsewhere. So much opportunity being squandered it makes me sick.

VW and BMW are investing billions. . Not everything har made it to the news yet.

It you look at ordets for sub contractors, those that deliver manufacturing technology, sensors and alignment systems – you will see that something is happening.
What I wonder is how long before other car companies (those that have not shown prototypes yet) are doing. Are they working in the background, or just waiting to see the adoptation of mass market EVs in real life?

Great to hear as recently were not in race with ICE engines, fingers crossed they can get the EV’s right and also fix all those cheap plastics that break off these days, plus the ridiculous computer intervention required even for changing brake fluid & pads these days. Mercedes Benz Australia are another company that seriously needs Australians lemon laws to push them in the right direction as they don’t wish to know you once they sell you a product. Many disgruntled owners here would dearly love to give the Australian Warranty / Customer support suits a 3 pointed suppository.

Mercedes has the Denza EV in China, and is launching BAIC EV’s too. Then there is the Smart ED, and their list of MB branded PHEV’s and EV. They have somewhere around half a dozen EV’s and PHEV’s that I know about across their various line of cars, and even an electric bus on the way.

They might not have the most compelling EV/PHEV’s, but they are actually putting out products. Gotta give them credit for that.

Tesla fan- yes; BUT it is not a manufacturer on the scale of the majors- will it ever be, or does Elon have other aims?
Tesla motors will be enshrined as the Great Disruptor that changed the status quo but will likely be swallowed by one or more of the established makers, eventually. Not that it will go out of business unless Elon decides his aims have been fully achieved.

Mercedes/Daimler does not want to produce/sell BEVs. Period. All their announcements, concept cars, future plans etc etc is nothing but much ado about nothing. Their Giga factory counter is zero. Their selling of ICE cars is at almost 100%. These are the facts.
All they want is to make you buy their new ICE cars as a “transition” technology to the promised land of sustainable transportation, which is supposed to never come true by their intensions. They even try to make you believe in the “fool” cell technology. It’s a big fairy tale they tell us. Well, but who would think of “honest” German automakers as liars?

Elon obviously doesn’t read InsideEVs enough, and either his head is above the clouds (in LEO) or buried underground (in a tunnel). I knew Daimler had put down $10 Billion over several years. Perhaps InsideEVs management could provide him a weekly RSS feed or even just a print-out by post of the top news bits. You could, for example, lay off the art contest imagine projects.

I wish all Twitter tete-a-tete’s were this cordial and didn’t cement our fears of the eventuality of global thermonuclear war.

Big talk from Mercedes, and welcome. But, how many pure EVs do they have on the market now? All this talk about how they are going to be as good or better than is Tesla today presupposes that Tesla will sit flat footed and make no progress, not lower their pricing and not offer more models. Come 2020 when Mercedes will have a few of their EVs out (maybe) Tesla will have a million EVs on the road.

Announcements from both Mercedes and Audi are promising. Now let’s wait for their actual cars. For now I am looking at Tesla model 3 as my next car. Others still need to learn how to make good electric cars. And learn quickly.

If this is about outspending Tesla, the news comes out about 5 years late. You can’t outspend Tesla with 10 billion investment over 5 years any more.

Let’s face it. For the next couple of years German car makers will struggle in the US market.